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Mylan Inc (NAS:MYL)
Beneish M-Score
-2.65 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Mylan Inc has a M-score of -2.65 suggests that the company is not a manipulator.

MYL' s 10-Year Beneish M-Score Range
Min: -4.35   Max: -0.52
Current: -2.65

-4.35
-0.52

During the past 13 years, the highest Beneish M-Score of Mylan Inc was -0.52. The lowest was -4.35. And the median was -2.48.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Mylan Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.925+0.528 * 0.9714+0.404 * 0.9123+0.892 * 1.0912+0.115 * 1.0808
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0518+4.679 * -0.0249-0.327 * 1.0395
=-2.65

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep14) TTM:Last Year (Sep13) TTM:
Accounts Receivable was $1,733 Mil.
Revenue was 2084 + 1837.3 + 1715.6 + 1808.543 = $7,445 Mil.
Gross Profit was 1012.4 + 808.8 + 737.8 + 795.943 = $3,355 Mil.
Total Current Assets was $5,818 Mil.
Total Assets was $15,174 Mil.
Property, Plant and Equipment(Net PPE) was $1,738 Mil.
Depreciation, Depletion and Amortization(DDA) was $540 Mil.
Selling, General & Admin. Expense(SGA) was $1,583 Mil.
Total Current Liabilities was $4,474 Mil.
Long-Term Debt was $5,724 Mil.
Net Income was 499.1 + 125.2 + 115.9 + 180.211 = $920 Mil.
Non Operating Income was 1.5 + -3.7 + -4.6 + -0.454 = $-7 Mil.
Cash Flow from Operations was 440.7 + 179.4 + 268.1 + 417.863 = $1,306 Mil.
Accounts Receivable was $1,717 Mil.
Revenue was 1767.4 + 1701.7 + 1631.5 + 1722.854 = $6,823 Mil.
Gross Profit was 808.5 + 742.4 + 693.5 + 742.316 = $2,987 Mil.
Total Current Assets was $4,343 Mil.
Total Assets was $12,902 Mil.
Property, Plant and Equipment(Net PPE) was $1,459 Mil.
Depreciation, Depletion and Amortization(DDA) was $503 Mil.
Selling, General & Admin. Expense(SGA) was $1,380 Mil.
Total Current Liabilities was $2,561 Mil.
Long-Term Debt was $5,779 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(1733.3 / 7445.443) / (1717.281 / 6823.454)
=0.23280012 / 0.25167327
=0.925

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(808.8 / 6823.454) / (1012.4 / 7445.443)
=0.43771322 / 0.45060354
=0.9714

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (5817.8 + 1738.3) / 15174.1) / (1 - (4343.167 + 1459.046) / 12901.574)
=0.50203966 / 0.55027092
=0.9123

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=7445.443 / 6823.454
=1.0912

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(502.682 / (502.682 + 1459.046)) / (540.197 / (540.197 + 1738.3))
=0.25624449 / 0.2370848
=1.0808

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(1583.229 / 7445.443) / (1379.545 / 6823.454)
=0.21264403 / 0.20217693
=1.0518

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((5723.5 + 4473.9) / 15174.1) / ((5779.438 + 2561.423) / 12901.574)
=0.67202668 / 0.64649949
=1.0395

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(920.411 - -7.254 - 1306.063) / 15174.1
=-0.0249

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Mylan Inc has a M-score of -2.65 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Mylan Inc Annual Data

Mar04Mar05Mar06Mar07Dec08Dec09Dec10Dec11Dec12Dec13
DSRI 0.94061.70650.81211.12811.04311.06940.87571.09620.98281.1519
GMI 0.95381.1150.99650.95381.2990.98921.00130.97280.97720.9725
AQI 0.77740.83951.1471.86912.18320.99850.99110.98930.95771.0748
SGI 1.08310.91181.0031.28213.18740.99131.07021.12461.10871.0166
DEPI 1.32741.18231.14441.25550.28791.08471.01630.91751.00411.1875
SGAI 1.07561.40950.86720.74591.53341.00560.96680.99391.04020.9913
LVGI 0.65671.15344.09761.08981.16410.96270.98791.09480.94031.0963
TATA 0.03-0.0169-0.1273-0.0642-0.0554-0.0365-0.0479-0.0145-0.0261-0.0268
M-score -2.30-2.09-4.16-2.04-0.34-2.58-2.75-2.41-2.54-2.44

Mylan Inc Quarterly Data

Jun12Sep12Dec12Mar13Jun13Sep13Dec13Mar14Jun14Sep14
DSRI 0.9651.07020.98280.90151.00631.10841.15191.08471.02620.925
GMI 0.99230.97290.97720.98480.96820.97220.97250.97110.98020.9714
AQI 0.97061.00270.95770.95060.95250.97311.07481.10621.11660.9123
SGI 1.09741.09471.10871.09251.07521.03321.01661.02181.03951.0912
DEPI 0.94860.99531.00411.00591.02351.12651.18751.19231.18651.0808
SGAI 1.03681.0161.04021.01930.96970.99730.98290.98591.06211.0518
LVGI 1.08630.97160.94031.1851.00211.07871.09630.92451.01161.0395
TATA -0.0162-0.0262-0.0261-0.0456-0.0307-0.0235-0.0268-0.0372-0.0398-0.0249
M-score -2.56-2.46-2.54-2.79-2.58-2.50-2.44-2.48-2.56-2.65
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